Sonat Extension Ok'd Over Mueser's Objections

FERC last week approved an amended certificate for Southern
Natural Gas (Sonat) to build a controversial mainline extension
that's intended to provide customers with an alternative to the
existing pipeline now serving northern Alabama. The fate of the
project, however, still hangs in the balance since the Interior
Department's Fish and Wildlife Service (FWS) hasn't yet issued
Sonat a permit to build through a protected wildlife refuge.

Nevertheless, the Commission's decision was a major win for
Sonat and other supporters of the pipeline project, but a big, yet
expected, blow for landowners and environmental activists who have
battled the project for nearly three years, and who promise to
continue in court. "We're very pleased" with the order, said David
Hendrickson, assistant general counsel of Sonat. However, GASP
Coalition Chairman Anne Marie Mueser, who represents landowner
interests, called it a "bad" decision all around.

By a majority vote, the Commission denied rehearing of its May
1997 order certificating the Sonat extension and requests for stay
of construction, and approved an amendment to the original
certificate that would permit the pipeline - in accordance with FWS
instructions - to build the southern section of the expansion along
the existing Interstate 65 corridor in the Wheeler National
Wildlife Refuge [CP96-153-002]. Sonat doesn't have an FWS permit
for that portion yet, but Hendrickson said the pipeline believes it
will be forthcoming within 60 days. Sonat initially had proposed
constructing the first leg of the extension along a "new" corridor
in the refuge, but the FWS flatly rejected that option.

In a final environmental impact statement issued last Wednesday,
the Commission staff found the amended route for the Sonat
extension would have "limited adverse environmental impact" if
constructed as planned and additional mitigation measures were
followed. "Several factors were important in our determination.
About 76% of the land that would be affected is unforested and it
would revert to its previous land use after construction. In
addition, a successfully completed directional drill of the
Tennessee River area would avoid impacting federally listed
threatened and endangered species...Finally, Southern's proposed
pipeline route is consistent with the FWS policy regarding the
establishment of new corridors across the Wheeler [National
Wildlife Refuge]..."

The Sonat case, which has been contentious from the very
beginning, had been scheduled as a discussion item at last
Wednesday's meeting, but at the last minute it was pulled and voted
on as a consent agenda item, which raised some eyebrows. "I find it
very interesting that they didn't have the guts to discuss this
thing in public before rubber-stamping it," Mueser complained.
"Certainly there are issues that were worthy of discussion. There
has been nothing straightforward about this process since Day One."

A Commission staff member, however, dismissed such a notion.
"...The Commission decided there was no need to talk about it. That
sometimes happens with regular agenda items. So it was simply
called with the consent agenda," which is the fate of most FERC
orders, especially ones which have been discussed before and just
involve a few changes.

Mueser, who has been at the forefront of the effort to halt the
Sonat project, sees a bright side to FERC's decision not to discuss
the case. "...[W]e now can go into court and hopefully get a fair
hearing on the issues and the merits." She noted that the original
certificate and the original route "up to the amendment" are now
ripe for court review. "I expect to be getting this into court [the
D.C. Circuit Court] before Christmas." In addition, Mueser plans to
seek rehearing of the amended route at the Commission.

Once in court, "...I think that we're going to be able to raise
the whole issue of eminent domain in a deregulated industry using
this project," she said. "I think we have a constitutional issue
here involving private property rights, and I think we also have
major environmental issues." Mueser said GASP will ask the court to
block construction of the Sonat extension until all issues are
settled.

More immediately, "we'll be spending a lot of effort in the next
few weeks to make sure they [Sonat] don't get a permit." This is a
"major hot-button issue," she noted. "Should Fish and Wildlife
issue a permit to cross the refuge...we will have them in court as
well."

The 120-mile, 70 MMcf/d mainline extension would start at
Tuscaloosa, AL, and would extend in a northeasterly direction
ending just west of Huntsville, AL. Sonat proposed the project
mainly to provide alternate transportation to two Alabama
utilities, Decatur Utilities and Huntsville Utilities, currently
sole-source customers of Midcoast Interstate Transmission. It also
would provide service to three of Sonat's existing customers that
want to increase their firm transportation quantitites. The
pipeline said it hopes to begin construction on the extension by
spring 1999 with deliveries to start Nov. 1.

In a related filing, the Commission denied rehearing of its
decision dismissing Midcoast Interstate's application to build what
the pipeline claimed was an environmentally preferable alternative
because Midcoast failed to demonstrate market support and it would
enable Midcoast to maintain its regional dominance.

But acknowledging "continued uncertainty" over whether the Sonat
extension will be built, FERC provided for an "interim solution" in
a related proceeding, granting Midcoast a one-year extension to
operate two extra compressors to serve the growing demand for
capacity in northern Alabama.

Susan Parker

&COPY;Copyright 1998 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.

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